Fennec Provides Business Update and Announces First Quarter 2018 Financial Results
May 14 2018 - 5:00AM
Fennec Pharmaceuticals Inc. (NASDAQ:FENC) (TSX:FRX), a specialty
pharmaceutical company focused on the development of PEDMARKTM (a
unique formulation of sodium thiosulfate (STS)) for the prevention
of platinum-induced ototoxicity in pediatric patients, today
reported financial results for the first quarter ended March 31,
2018.
"We have built significant momentum since the
start of this year highlighted by the Breakthrough Therapy and Fast
Track designations granted by the FDA," said Rosty Raykov,
President and Chief Executive Officer of Fennec. "We look forward,
over the next several months, to what we believe will be
significant value creating milestones, including preparing for
regulatory submissions for PEDMARK." Mr. Raykov continued, "From a
financial perspective we continue to be vigilant about our cash use
and remain well positioned through these important milestones and
beyond."
Investor Events
- Jefferies 2017 Global Healthcare
Conference – Rosty Raykov, CEO of Fennec, will
provide an overview of the Company’s business on Thursday, June 7
at 4:00 pm at the Jefferies 2018 Global Healthcare Conference being
held in New York City. The Fennec presentation will be webcast live
and can be accessed by visiting the investors relations sections of
the Company’s website
at http://fennecpharma.com/investors/presentations-events/.
A replay of the presentation will also be available and archived on
the site for ninety days.
- Annual Meeting of Shareholders – Fennec
would like to invite all shareholders to attend its Annual General
and Special Meeting on Thursday, June 7, 2018 at 10 am at the Omni
Berkshire Hotel in New York in the Sutton Room, 21 E. 52nd Street,
New York, New York.
Financial Results for the First Quarter
2018
- Cash Position - Cash and cash equivalents were
$26.7 million as of March 31, 2018. The reduction in cash balance
over the quarter ended March 31, 2018, is the net result of cash
used for operating activities offset by the inflow of $0.19 million
from the exercise of various options and warrants.
- R&D Expenses - Research and development
(R&D) expenses were $0.7 million for the three months ended
March 31, 2018, compared to $0.2 million for the same period in
2017. The increase in R&D expenses for the comparative three
months, is primarily due to the manufacturing and regulatory
expenses for the regulatory approval and planned commercialization
of PEDMARKTM.
- G&A Expenses - General and administrative
(G&A) expenses were $1.1 million for the three months ended
March 31, 2018, compared to $0.5 million same period in 2017.
The increase in G&A expenses in 2018 over 2017 primarily
relates to an increase in non-cash equity compensation as well as
an increase in general corporate and compliance
expenses.
- Net Loss - Net loss was $1.6 million and $0.8
million for the three months ended March 31, 2018 and 2017,
respectively.
- Financial Guidance - The Company believes its
cash and cash equivalents on hand as of March 31, 2018 will be
sufficient to fund the Company's planned commercial launch of
PEDMARKTM in the second half of 2019.
Financial Update
The selected financial data presented below is
derived from our audited condensed consolidated financial
statements which were prepared in accordance with U.S. generally
accepted accounting principles. The complete interim
unaudited consolidated financial statements for the period ended
March 31, 2018 and management's discussion and analysis of
financial condition and results of operations will be available via
www.sec.gov and www.sedar.com. All values are presented in
thousands unless otherwise noted.
|
Three Months Ended |
Interim Unaudited Statement of Operations |
March 31, 2018 |
|
March 31, 2017 |
(U.S.
Dollars in thousands except per share amounts) |
|
|
|
Revenue |
$ |
- |
|
|
$ |
- |
|
Operating expenses |
|
|
|
Research
and development |
|
689 |
|
|
|
225 |
|
General
and administrative |
|
1,102 |
|
|
|
546 |
|
Loss from
operations |
|
(1,791 |
) |
|
|
(771 |
) |
Unrealized gain/(loss) |
|
167 |
|
|
|
(37 |
) |
Other
loss |
|
(3 |
) |
|
|
(1 |
) |
Interest
income |
|
59 |
|
|
|
3 |
|
Net loss |
$ |
(1,568 |
) |
|
$ |
(806 |
) |
|
|
|
|
Basic and diluted net loss per common share |
$ |
(0.09 |
) |
|
$ |
(0.06 |
) |
Fennec Pharmaceuticals Inc. |
Balance Sheets |
(U.S. Dollars in thousands) |
|
March 31, 2018 |
|
December 31, 2017 |
Assets |
|
|
|
Cash
and cash equivalents |
$ |
26,719 |
|
$ |
28,260 |
Other
current assets |
|
117 |
|
|
141 |
Total Assets |
$ |
26,836 |
|
$ |
28,401 |
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
Current liabilities |
$ |
1,173 |
|
$ |
1,477 |
Derivative liabilities |
|
- |
|
|
167 |
Total
stockholders’ equity |
|
25,663 |
|
|
26,757 |
Total liabilities and stockholders’ equity |
$ |
26,836 |
|
$ |
28,401 |
Working Capital |
Three Months Ended |
Selected Asset and Liability Data: |
March 31, 2018 |
|
December 31, 2017 |
(U.S.
Dollars in thousands) |
|
|
|
Cash
and cash equivalents |
$ |
26,719 |
|
|
$ |
28,260 |
|
Other
current assets |
|
117 |
|
|
|
141 |
|
Current liabilities excluding derivative liability |
|
(1,173 |
) |
|
|
(1,477 |
) |
Working capital |
$ |
25,663 |
|
|
$ |
26,924 |
|
|
|
|
|
Selected Equity: |
|
|
|
Common stock |
$ |
103,337 |
|
|
$ |
103,045 |
|
Accumulated deficit |
|
(122,936 |
) |
|
|
(121,368 |
) |
Stockholders’ equity |
|
25,663 |
|
|
|
26,757 |
|
|
|
|
|
At March 31, 2018, the Company had working
capital balance totaling approximately $25.7 million compared to
$26.9 million as of December 31, 2017.
Dollar and shares in thousands |
Three Months Ended March 31, |
Selected cash flow data: |
2018 |
|
|
2017 |
|
Net
cash used in operating activities |
(1,727 |
) |
|
(675 |
) |
Net
cash provided by investing activities |
- |
|
|
- |
|
Net
cash provided by financing activities |
186 |
|
|
- |
|
Decrease in cash and cash equivalents |
(1,541 |
) |
|
(675 |
) |
Forward looking statementsExcept for historical information
described in this press release, all other statements are
forward-looking. Forward-looking statements are subject to certain
risks and uncertainties inherent in the Company’s business that
could cause actual results to vary, including such risks that
regulatory and guideline developments may change, scientific data
may not be sufficient to meet regulatory standards or receipt of
required regulatory clearances or approvals, clinical results may
not be replicated in actual patient settings, protection offered by
the Company’s patents and patent applications may be challenged,
invalidated or circumvented by its competitors, the available
market for the Company’s products will not be as large as expected,
the Company’s products will not be able to penetrate one or more
targeted markets, revenues will not be sufficient to fund further
development and clinical studies, the Company may not meet its
future capital requirements in different countries and
municipalities, and other risks detailed from time to time in the
Company’s filings with the Securities and Exchange Commission
including its Annual Report on Form 10-K for the year ended
December 31, 2017. Fennec Pharmaceuticals, Inc. disclaims any
obligation to update these forward-looking statements except as
required by law.
For a more detailed discussion of related risk
factors, please refer to our public filings available at
www.sec.gov and www.sedar.com.
About PEDMARK™ (Sodium Thiosulfate
(STS))
Cisplatin and other platinum compounds are essential
chemotherapeutic components for many pediatric malignancies.
Unfortunately, platinum-based therapies cause ototoxicity in
many patients, which is particularly harmful to the survivors of
pediatric cancer.
In the U.S. and Europe there is estimated that over
10,000 children may receive platinum based chemotherapy. The
incidence of hearing loss in these children depends upon the dose
and duration of chemotherapy, and many of these children require
lifelong hearing aids. There is currently no established preventive
agent for this hearing loss and only expensive, technically
difficult and sub-optimal cochlear (inner ear) implants have been
shown to provide some benefit. Infants and young children at
critical stages of development lack speech language development and
literacy, and older children and adolescents lack social-emotional
development and educational achievement.
STS has been studied by cooperative groups in two Phase 3
clinical studies of survival and reduction of ototoxicity, The
Clinical Oncology Group Protocol ACCL0431 and SIOPEL 6. Both
studies are completed. The COG ACCL0431 protocol enrolled one of
five childhood cancers typically treated with intensive cisplatin
therapy for localized and disseminated disease, including newly
diagnosed hepatoblastoma, germ cell tumor, osteosarcoma,
neuroblastoma, and medulloblastoma. SIOPEL 6 enrolled only
hepatoblastoma patients with localized tumors.
About Fennec
Pharmaceuticals
Fennec Pharmaceuticals, Inc., is a specialty
pharmaceutical company focused on the development of Sodium
Thiosulfate (STS) for the prevention of platinum-induced
ototoxicity in pediatric patients. STS has received Orphan Drug
Designation in the US in this setting. For more information, please
visit www.fennecpharma.com.
For further information, please
contact:
Rosty RaykovChief Executive OfficerFennec
Pharmaceuticals Inc.T: (919) 636-5144
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